Tariff Rebate Subsidy (Northern Isles)

Part of Prayers – in the House of Commons at 9:58 am on 12th March 1997.

Alert me about debates like this

Photo of Mr Phil Gallie Mr Phil Gallie , Ayr 9:58 am, 12th March 1997

I do not disagree with any of the hon. Gentleman's comments. Had I been a Member of Parliament before 1992, I should have wanted the Select Committee to be reconstituted, and I have worked pretty assiduously within the Committee since being elected. What happened before 1992 is another matter entirely.

I want to say to the hon. Member for Kilmarnock and Loudoun that recently we carried out an interesting investigation into community care, and I hope that today's debate has not slowed efforts to get that report published. I should like to think that I shall be here in the next Parliament to debate that issue on the Floor of the House, because it is vital to Scotland.

This debate arises from the abandonment in 1994 of the tariff rebate subsidy, albeit in conjunction with maintaining it at a reducing level for fish oil, fish meal and livestock. One pleasing aspect of the Committee's investigation is the fact that, as a direct consequence, my right hon. Friend the Secretary of State has uprated the TRS for livestock, principally in support of the Kirkwall-Invergordon route. The TRS has been uprated from 33 per cent. to 50 per cent.; I welcome that, and the Government's comments. The one thing that is not stated in the Government response is whether that is against a fixed time scale. I would suggest to my right hon. Friend or his successor, although I think that he will remain in his post after the general election, that that uprating should be continued.

The subsidy for Northern Isles services was turned around to the block grant for passenger services, to be competed for by service providers. As the hon. Member for Kilmarnock and Loudoun suggested, in the first instance, that certainly seemed to favour P and O Scottish Ferries and, to a degree, it allowed the company to set its own standards for that service. The results appear to be acceptable and they are welcome to Shetlanders, who receive a regular and extremely good service between the islands and Aberdeen, and there is no doubt that the service suits the commercial interests and tourism industry on Shetland.

However, concerns about the under-usage of capacity that was identified in the Committee's report are ignored. One difficulty that the Government must recognise is the difference of opinion between people on Shetland and people on Orkney. An easy answer might be for the Government to come up with additional cash to throw in different ways at the different islands, but I do not believe that that is a practical solution.

There are other issues in the report on which the Government have acted positively. They have addressed the issue of regulation of maximum freight tariffs within the passenger ferry service contract. However, in addition, we should consider the charges made in respect of cross-subsidy by P and OSF and examine the extent to which minimum freight tariffs would be appropriate. I am advised that P and OSF levies a livestock charge on the Invergordon run of £5.15 per head of cattle, which compares with a charge of £17.38 in 1992. Given Orcargo's charges, the 1992 figure appears to be more appropriate.